Sunridge Gold says feasibility study for Asmara project will improve with staged start-up

Sunridge Gold Corp. (CVE:SGC) (OTCQX:SGCNF) says the feasibility study for its Asmara project in Eritrea is on schedule for completion in early May, and will include a staged start-up process over the first three years of the mine life in order to achieve early cash flow and minimize initial capital costs.

The company on Wednesday said that the study is focused on four of the five deposits that comprise Asmara and will outline a mining plan that integrates the four deposits being processed at a central concentrator near the large Emba Derho copper-zinc-gold-silver deposit. 

Asmara consists of the Emba Derho, Debarwa and Adi Nefas copper-zinc-gold and silver deposits and the Gupo gold deposit, as well as the fifth defined deposit, Adi Rassi, where the company late last year announced an initial resource estimate. 

A positive prefeasibility study (PFS) for the Asmara project, completed last May, considered four deposits - excluding Adi Rassi - being processed at a central mill, and showed a pre-tax net present value of $555 million at a 10 per cent discount rate. The IRR was 27 per cent, with an initial capital cost pegged at $489 million.  

The PFS also showed that the mine would produce a total of 365,000 tonnes of copper, 812,000 tonnes of zinc, 415,000 ounces of gold and 11 million ounces of silver over an approximate 15 year mine life. 

Sunridge said that the Asmara feasibility study will see improvements over the PFS mining plan, including a staged start-up.

Phase 1A will see the company mine by open-pit, crush, ship and sell high-grade copper and gold material as "direct shipping ore" material from the supergene copper zone at Debarwa over a 10 to 12 month period. This zone contains 116,000 tonnes at 16.0 per cent copper, 3.0 grams per tonne (g/t) gold, and 77.0 g/t silver.

Phase 1B will focus in gold production and will see Sunridge use its gold heap-leach process plant at Emba Derho to recover gold and silver from the near surface “gold caps” at  Emba Derho and Debarwa, as well as the gold-only Gupo deposit over a period of 36 to 48 months. 

The Canadian-listed junior company said that phase 2 will focus on copper production, where it expects to mine and process 2.4 million tonnes of high-grade copper supergene ore (less the DSO zone) at a rate of 5,500 tonnes per day – or 2 million tonnes per year - from Debarwa and Emba Derho for 15 months, at the same time as phase 1B is in production.

Finally, phase 3 will include both copper and zinc production. Sunridge said it will mine and process primary copper and zinc ore at full production from Emba Derho, Debarwa and Adi Nefas at a rate of 11,000 tonnes per day, or 4 million tonnes per year, for 13 to 15 years. 

Meanwhile, the company said negotiations are ongoing for the Eritrean National Mining Corporation’s (ENAMCO) purchase of a 30-per-cent working interest in the Asmara project. On completion of the purchase, ENAMCO will have a 10-per-cent carried interest and a 30-per-cent working interest and will be responsible for funding one-third of the costs of all operations conducted on the project, which may include a portion of the study.